The Beast Called Government

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Things are not going well for President Obama and the executive branch of the federal government these days. The latest of many recent troubles involves the disaster at the VA where we are learning that the huge governing bureaucracy was more dedicated to employee compensation schemes than to the needs of our veterans. The VA scandal is a classic case of a government bureaucracy run amok. But then again what huge public bureaucracy of any kind does not eventually run amok?

As the country is focused on the VA, another out-of-control federal bureaucracy is ready to strike. This time it is the Environmental Protection Agency (EPA) as this agency just announced massive new regulations designed to shut down coal power plants, plants that now deliver 38% of the nation's electricity. The EPA's ruling will not only add costs to our electricity bills at home, but it will also cause 224,000 jobs to disappear through 2030 and reduce the nation's GDP by $51 billion annually, according to US Chamber of Commerce. What is particularly alarming is that this very legislation did not have the votes to become law during Obama's first term when both houses had Democratic majorities. So the President, doing his best imitation of his once close ally Vladimir Putin, decided that unilateral executive action was his preferred path and he ordered done what Congress did not pass, and the EPA's costly carbon sanctions became law.

The common denominator of the VA and the EPA is that both are comprised of executive branch appointees as opposed to elected representatives and both are massive in size and complexity with close to 20,000 employees each. Not only is power accumulating into the hands of political appointees, but those appointees are simply not accountable to the American voters and apparently not particularly accountable to the President himself. Unaccountable government not only tends to deliver awful customer service while promoting perverse incentives (as evidenced by the VA and IRS), but the longer term consequences are even more dangerous as the nation continues to feed these agencies with more money and more power. In 2013 alone, 80,224 pages of regulations were added to the Federal Register, a 3.8% increase over 2012. The number of "economically significant" regulations increased by 25%, and the number of rules imposing "unfunded mandates on states or private entities" grew by 38%, according to the American Action Forum. More government continues to mean more regulations, higher taxes and less freedom. And make no mistake, what put the United States on the map as the greatest nation in world history was its dedication to freedom.

Unfortunately, there is a huge financial cost to government creep. The Heritage Foundation's index of Economic Freedom notes that our nation's freedom rating, measured in part by higher taxes and by increasing regulations, has fallen for the past 6 years so it is not a surprise that our economy has been mired in a long-time slump. Almost unnoticed was last week's report that not only did our economy not grow in the last quarter, but that it actually contracted by 1% according to the Commerce Department. The classic adage in economics is that if you tax something, you will get less of it. Unfortunately, we have the taxing part down pat driven by the need to keep funding our expanding government. The OMB predicts that taxes collected federally will set an all-time record this year even when adjusted for inflation. In this instance, what we get less of is wealth and jobs and this will continue until we stop the nonsense that bigger government means a better government.

Our economy will continue to slide until we elect leaders and a president especially that will fight to reverse the growth of government whether by legislation or by executive order. Even for a most experienced and management savvy administration (a far cry from the situation today), government has grown too large and too complex to be managed effectively. Now is the time to explore all ideas to dismantle these freedom devouring government agencies starting at the VA with the concepts of privatization and outsourcing. Unfortunately it is much tougher to contract than to expand, but dismantling the beast called government must surge to become today's top priority if our country is to get back on track.